Bitcoin Gains Momentum as SEC Nears Decision on Spot Bitcoin ETFs

Bitcoin has experienced a surge in recent days, buoyed by growing anticipation surrounding the possible approval of spot Bitcoin exchange-traded funds (ETFs) in the United States. This digital currency skyrocketed to $30,000 on October 16, marking its highest value since August 9, following a misleading report of a Spot Bitcoin ETF approval by the U.S. Securities and Exchange Commission (SEC). At present, Bitcoin is trading at around $28,300, reinforcing its resilience amid market fluctuations.

Bitcoin Gains Momentum as SEC Nears Decision on Spot Bitcoin ETFs
Bitcoin Gains Momentum as SEC Nears Decision on Spot Bitcoin ETFs

Spot Bitcoin ETF Approval Could Boost Bitcoin’s Market Cap by $1 Trillion

According to data analytics firm CryptoQuant, the approval of spot Bitcoin ETFs could potentially inject a staggering $1 trillion into the overall cryptocurrency market cap, which currently stands at $550 billion. Spot Bitcoin ETFs differ from their futures-based counterparts by tracking the actual price of Bitcoin rather than Bitcoin futures contracts.

Image Source: CryptoQuant
Image Source: CryptoQuant

The CryptoQuant report asserts that spot Bitcoin ETFs hold the potential to attract a diverse investor base, from institutional investors to retail traders, seeking a more convenient and secure avenue for gaining exposure to Bitcoin. The analysis also estimates that spot Bitcoin ETF approvals could bring in approximately $155 billion in inflows.

Several prominent U.S. financial institutions, including Fidelity, Ark Invest, Invesco, VanEck, WisdomTree, and Valkyrie, have submitted applications to launch spot Bitcoin ETFs in the U.S. However, none of these applications have received the green light from the SEC thus far. The regulatory body has cited concerns about potential market manipulation, investor protection, and custody issues, resulting in repeated delays in decision-making.

Fidelity Amends Its Spot Bitcoin ETF Filing

Speaking of, Fidelity made a pivotal move by amending its proposed Wise Origin Bitcoin Trust on October 17. This amendment outlines Fidelity’s strategies for safeguarding customers’ Bitcoin in custody accounts and addressing regulatory challenges and risks, among other critical factors.

Image Source: SEC

This adjustment follows similar amendments made by Ark Invest and Invesco. These amendments are perceived as indications of ongoing discussions between prospective ETF providers and the SEC, fostering optimism among traders.

James Seyffart, a research analyst at Bloomberg Intelligence, notes, “More proof that potential spot Bitcoin ETF issuers are in communication with SEC regarding changes/amendments required for SEC to consider approving. Positive signs (in my opinion).”

A Ray of Hope on the Horizon

Market analysts are now speculating that the SEC may give the nod to a spot Bitcoin ETF by March 2024, which coincides with the statutory deadline for the regulator to make its final determination on the applications.

Meanwhile, Bloomberg analysts believe that this approval could come sooner. They speculate that there’s a 90%–95% chance that the SEC will greenlight a spot Bitcoin ETF application by January 10, 2024.

Image Source: X

If this scenario unfolds, Bitcoin could experience a monumental rally, possibly catapulting it to previous highs.

BTC Moving Towards $30,000

As mentioned at the outset, Bitcoin recorded an aggressive rally on October 16 following a false report on a Bitcoin ETF approval. However, this move was not sustained—and understandably so—as the benchmark cryptocurrency rapidly fell to the $28,000 area where it currently sits.

BTC/USDT Daily Chart From TradingView

It’s worth mentioning that Bitcoin was already on a bullish path before the flash move, which gives us reason to believe that the cryptocurrency could hold its ground above the $28,000 mark over the coming days as a reversal likely plays out. That said, it might not be too long before we see a retest of the critical $30,000 mark.

BTC Statistics Data

BTC Current Price: $28,300

Market Cap: $552B

BTC Circulating Supply: 19.5M

Total Supply: 21M

BTC Market Ranking: #1

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Azeez Mustapha

Azeez began his FinTech career path in 2008 after growing interest and intrigue about market wizards and how they managed to become victorious on the battlefield of the financial world. After a decade of learning, reading and training the ins and outs of the industry, he’s now a sought after trading professional, technical/currency analyst and funds manager – as well as an author. He is a Senior Crypto trader and market analyst at Learn2.trade

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Azeez Mustapha
Azeez began his FinTech career path in 2008 after growing interest and intrigue about market wizards and how they managed to become victorious on the battlefield of the financial world. After a decade of learning, reading and training the ins and outs of the industry, he’s now a sought after trading professional, technical/currency analyst and funds manager – as well as an author. He is a Senior Crypto trader and market analyst at Learn2.trade